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"What I'm very sure of is that whilst we don't know who the winner was, there is clearly one loser: Malcolm Turnbull's agenda for Australia and his efforts to cut Medicare," Mr Shorten said.

"If Malcolm Turnbull could go back to being the old Malcolm Turnbull and stand up on climate change, we could do a deal on climate change in very short time."

"If Malcolm Turnbull would go back to being the old Malcolm Turnbull before he was hostage to the right wing of his party, we could sort out marriage equality within 100 days of this election."

Mr Shorten said he had spoken with crossbenchers about how Labor can work constructively with the parliament to implement its policy plan, but would not say which crossbenchers when further questioned on the matter.

At the time of publication, 77.8 percent of the vote has been counted and 13 seats are still in doubt.

Last night the Australian Electoral Commission delivered a blow to the Coalition by giving Labor the lead in two-party preferred terms.

The AEC updated the swing to the ALP to 3.7 percent, putting it ahead of the Coalition by the slimmest of margins.

ABC election analyst Antony Green explained the jump by saying the AEC data did not include the two-party preferred count from the 16 closest electorates.

"Change was from Grey, Mayo, Higgins, Barker and Cowper being excluded this morning," Green tweeted.

Earlier, the AEC confirmed counting would not take place until Tuesday.

"The AEC's focus today, Sunday 3 July, is on the declaration vote exchange. The declaration vote exchange is where the large numbers of absent, interstate, postal and other declaration votes are reconciled, sorted and packaged ready for despatch to the home division from Monday," the AEC said in a statement.

"On Monday, the AEC will continue the process of verifying more than one million postal votes already returned to the AEC so that they can be admitted to the count beginning on Tuesday."

AEC staff and volunteers counted more than 11 million House of Representatives votes after the polls closed at 6pm in each state and territory.

With such a close election it will be likely that the major parties will dispute some votes and legally challenge others in close competition seats.

Malcolm Turnbull said he was "confident" of the coalition being able to govern in its own right.

"I have every confidence we will form a coalition majority government," Mr Turnbull, speaking at the Sydney's Sofitel, told his supporters.

The prime minister blamed the tight result on Bill Shorten's "Mediscare" campaign, which he described as a lie that led voters down the garden path.

"The mass ranks of the union movement and all of their millions of dollars telling vulnerable Australians that Medicare would be sold," he said.

"As voters went to the polls, there were text messages sent to thousands across Australia saying Medicare was about to be sold. This is the scale of the challenge we face and regrettably more than a few people were misled."

In a heated denouncement of the text message, Mr Turnbull suggested a police investigation may follow.

Mr Turnbull explained that while counting continued into the early hours of Sunday morning, scrutineers will down tools until Tuesday, when the result is expected.

He also spoke of the thrice-rejected ABCC bill that triggered the double dissolution – the first time it has been mentioned since the beginning of the campaign.

We need to restore the rule of law to the construction industry," Mr Turnbull said. "There is a culture of thuggery and intimidation and bullying in the construction sector."

Earlier Bill Shorten said that while the outcome of the election may not be known for days, the government has "lost its mandate".

Speaking to a raucous crowd of the party faithful in Melbourne, an energised Opposition Leader said that regardless of the result, Australians have sent a clear message to Malcolm Turnbull.

"Mr Turnbull’s economic program, such as it was, has been rejected by the people of Australia," Mr Shorten said.

"Whatever happens next week, Mr Turnbull will never be able to claim that the people of Australia have adopted his ideological agenda."

The AEC has reported a three percent swing overall in Labor's favour – shy of the four percent the party needs to seize government, but enough to likely force a hung parliament.

The bellwether NSW seat of Eden-Monaro has fallen to Labor, with the party also likely to claim victory in the Western Sydney division of Lindsay.

Labor also benefited from redrawn electoral boundaries in Barton, where Linda Burney stormed to victory. She will become the first female Aboriginal member of parliament in Australian history.

Meanwhile Deputy Prime Minister Barnaby Joyce has managed to fend off his rival, Tony Windsor, to hold onto New England after a vicious campaign. Former Prime Minister Tony Abbott has also retained his seat in Warringah despite a more than nine percent swing against him.

In the Senate Nick Xenophon has increased his power bloc, picking up at least two more Upper House seats and one in the bear pit. The NXT's Lower House seat used to belong to disgraced Liberal MP Jamie Briggs, who lost his seat in Mayo to Rebekha Sharkie
, a former staffer of his.

Also bound for the crossbench is Pauline Hanson, who has finally ended her stint in the wilderness after her memorable first foray into federal politics in 1998.

Despite the tectonic shift away from the government, however, former treasurer Peter Costello was still prepared to call the result in favour of the government, but there are few prepared to back or dispute that proclamation right now.

"I don't think we're going to know the result tonight and I think that Peter Costello may well find himself looking a little bit premature," Labor’s Anthony Albanese said.

The night was the culmination of Turnbull's long slide down the personal approval ratings snake, set against an unexpectedly strong performance from a dogged Shorten.

Kicked off by a double dissolution triggered by the Senate's repeated blocking of a Howard-era anti-union watchdog, the Coalition’s campaign did not wash with voters.

The government, touting a "clear plan for jobs and growth", was wrong-footed early by Labor, which shunned the orthodox “small target” opposition strategy to roll out a broad set of election policies.

"I think the conservatives, the people that are angry that Tony Abbott got the chop will use this, they'll start using it tomorrow," Nine’s political editor Laurie Oakes said.

"They will portray this as the bloke who knocked off Tony Abbott leading them into an almost defeat and that's bad news for Malcolm Turnbull."

Mr Shorten surprised the electorate when he came out hard on the abolition of negative gearing, investing in education and a marriage equality vote in the parliament within the first 100 days of a Labor government.

Mr Turnbull, a long-time proponent of gay marriage, has faced heavy criticism over his plan to hold a plebiscite on the issue, despite his repeated assurances that the legislation will "sail through" parliament.

The victorious party, if it fails to gain enough seats to govern under its own steam, will likely be forced to form a minority government – and that means striking deals nobody wants to make.

It seems likely that the balance of power in the Lower House could rest with independents Andrew Wilkie, Rebekha Sharkie, Cathy McGowan, Bob Katter, and the Greens' Adam Bandt.

The Greens have already ruled out working with the Liberal Party, while Labor has ruled out working with the Greens.